Retirement Income Security and Well-Being in Canada
A large international literature has documented the labor market distortions associated with social security benefits for near-retirees. In this paper, we investigate the 'other side' of social security programs, seeking to document improvements in wellbeing arising from the provision of public pensions. To the extent households adjust their savings and employment behavior to account for enhanced retirement benefits, the positive impact of the benefits may be crowded out. We proceed by using the large variation across birth cohorts in income security entitlements in Canada that arise from reforms to the programs over the past 35 years. This variation allows us to explore the effects of benefits on elderly well-being while controlling for other factors that affect well-being over time and by age. We examine measures of income, consumption, poverty, and happiness. For income, we find large increases in income corresponding to retirement benefit increases, suggesting little crowd out. Consumption also shows increases, although smaller in magnitude than for income. We find larger retirement benefits diminish income poverty rates, but have no discernable impact on consumption poverty measures. This could indicate smoothing of consumption through savings or other mechanisms. Finally, our limited happiness measures show no definitive effect.
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- Michael Baker, 2003.
"The Retirement Behavior of Married Couples: Evidence From The Spouse's Allowance,"
993, University of California, Davis, Department of Economics.
- Michael Baker, 2002. "The Retirement Behavior of Married Couples: Evidence from the Spouse's Allowance," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 1-34.
- Michael Baker, . "The Retirement Behavior of Married Couples: Evidence From The Spouse’s Allowance," Department of Economics 99-03, California Davis - Department of Economics.
- Michael Baker, 1999. "The Retirement Behavior of Married Couples: Evidence from the Spouse's Allowance," NBER Working Papers 7138, National Bureau of Economic Research, Inc.
- Michael Baker, 1999. "The Retirement Behavior of Married Couples: Evidence From the Spouse's Allowance," Working Papers baker-99-01, University of Toronto, Department of Economics.
- Michael Baker & Jonathan Gruber & Kevin Milligan, 2004. "Income Security Programs and Retirement in Canada," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 99-152 National Bureau of Economic Research, Inc.
- Michael Baker & Jonathan Gruber & Kevin Milligan, 2007. "Simulating the Response to Reform of Canada," NBER Chapters, in: Social Security Programs and Retirement around the World: Fiscal Implications of Reform, pages 83-118 National Bureau of Economic Research, Inc.
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